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AffiliationDecision and Game Sciences, Kellogg School of Management, Northwestern

HostHenry Cohn

Duration01:28:19

Date recorded8 July 2009

Asymmetric private information amplifies the difficulty for players to cooperate and achieve efficiency in strategic games. We give a new cooperative solution for two-player *Bayesian* strategic games, which takes into account both elements of cooperation and competition.

Under a revealed payoff assumption, we give a simple incentive-compatible, efficient mechanism that implements this solution. We argue that this solution gives the unique "fair" value using the axiomatic approach.